Finance
H&M flags slow winter sales even as fourth-quarter profits beat expectations
Published by Global Banking & Finance Review®
Posted on January 29, 2026
2 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 29, 2026
2 min readLast updated: January 29, 2026
H&M's Q4 profit rose to 6.36 billion crowns, surpassing forecasts. Despite this, a 2% sales dip is expected in December and January.
By Greta Rosen Fondahn
STOCKHOLM, Jan 29 (Reuters) - H&M warned of a slowdown in recent winter sales on Thursday even as cost controls helped the fast-fashion retailer record better-than-expected results for the September-to-November quarter.
Operating profit in H&M's fourth quarter, which includes Black Friday, rose 38% from a year earlier to 6.36 billion crowns ($724 million) against an LSEG analysts' poll forecast of 5.53 billion crowns. Operating margin widened to 10.7% from 7.4%.
"Through a strengthened customer offering, good cost control and improved inventory productivity, we continue to take important steps towards all our long-term targets in a challenging environment," CEO Daniel Erver said.
During his two years on the job, Erver has sought to improve profitability, partnering with pop stars to make H&M trendier and tightening cost control.
While local-currency sales grew 2% in the quarter, they dropped 2% in December and January, the rival to Zara-owner Inditex said, pointing to calendar effects.
Chief Financial Officer Adam Karlsson told analysts and media that lingering weak consumer confidence, particularly in some European markets, may increase the need to offer discounts this quarter.
H&M also said it expected trade tariff costs to rise.
Its shares fell around 1% by 1140 GMT as disappointment over the company's outlook outweighed the upbeat quarterly results.
H&M's stock has risen 31% over the past six months supported by a recovery in margins. But analysts say Erver must now show he can also reignite sales.
H&M, whose customers are considered more price-sensitive than Zara's, has faced pressure for years as shoppers tighten spending amid higher living costs and global uncertainty.
It is struggling to accelerate sales as cut-price online retailers like Shein compete for its customers and Zara dominates the upmarket end of fast fashion.
H&M proposed a dividend of 7.10 crowns per share, up from 6.80 crowns and above an expected 6.83 crowns.
($1 = 8.7903 Swedish crowns)
(Reporting by Greta Rosén Fondahn and Anna Ringstrom; Editing by Joe Bavier)
Operating profit is the profit a company makes from its normal business operations, excluding any income derived from non-operational activities, taxes, or interest payments.
Local currencies refer to the currency that is used in a specific country or region, which is typically used for domestic transactions and trade.
Financial performance is a measure of how well a company can use its assets to generate revenues and profits over a specific period.
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